Where Independent Agents Go for Independence

Agents and Brokers principles of ethical market conduct Each insurance agent and broker subscribing to these principles commits themselves in all matters affecting the sale of individually sold life and annuity products:

I will conduct business according to high standards of honesty and fairness and render that my service to my clients which, in the same circumstances, I would apply to or demand for myself.

I will provide competent and customer-focused sales and service and will maintain a level of professional competence through a lifetime commitment to professional growth and continuing education.

I acknowledge the different constituents whom I serve: insurance companies and the wider insurance industry, my clients, my client’s advisors, my community, and my family - and I will ethically resolve any conflicts that might arise between those relationships.

I will communicate fully and effectively so that clients receive appropriate recommendations that balance the natural inclination to maximize benefits, tempered by their unique tolerance - or lack of tolerance - for risk.

I will deliver to my client a statement of business processes, methods of compensation, and other disclosures appropriate to an open and professional business relationship.

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Tax-Free Retirement Plans

Permanent Life Insurance (Section 7702 Plans/TFRAs): life insurance policies can build cash value that can be accessed as tax-free income through policy loans in retirement.   These have no contribution limits and are not subject to RMDs.

The Kai-Zen System:  a specific type of financed indexed universal life (IUL) insurance plan that uses leverage to help income earners accumulate more wealth for retirement.

How it Works: The plan uses bank financing to supercharge contributions to a cash-accumulating life insurance policy. The participant (or their employer) makes contributions for the first 5 years, while a bank finances the majority of the premiums (often a 3:1 leverage ratio). The life insurance policy itself serves as the sole collateral for the commercial loan, which means participants typically do not need to sign loan documents or provide personal guarantees.

Benefits: The goal is to build a larger cash value faster than could be done through self-funding alone. This cash value grows tax-deferred, has a 0% floor to protect against market losses, and can provide a stream of tax-free income during retirement through policy loans. It also includes a death benefit and living benefit riders for critical/chronic illness.

Target Audience: It's designed for higher income earners who may have already maxed out traditional retirement plans (like 401ks and IRAs) and are looking for additional tax-advantaged savings options.   

• Roth IRA:  an individual retirement account funded with after-tax dollars.
  • Contributions & Withdrawals: Contributions can be withdrawn anytime, for any reason, without taxes or penalties. Qualified withdrawals of earnings (after age 59½ and meeting the five-year rule) are entirely tax-free.
  • Limits & Rules: It has annual contribution limits of $7,500 for individuals under age 50, and an increased contribution limit of $8,600 for individuals over age 50. Roth IRAs also have no required minimum distributions (RMDs) during the original owner's lifetime.
• Roth 401(k): This option is offered through an employer's retirement plan.
  • Contributions & Withdrawals: Contributions are made with after-tax money, and qualified withdrawals are tax-free.
  • Limits & Rules: It has annual contribution limits of $7,500 in 2026, plus a $1,100 catch-up for ages 50-59 totaling $8,600, and an additional super catch-up of $11,250 for ages 60-63, for a total of $35,750. Unlike a Roth IRA, has no income limits for contributions. Roth 401(k) accounts generally are subject to RMDs, but these can often be rolled into a Roth IRA to avoid them.

Other Sources of Tax-Free Retirement Income

Health Savings Account (HSA): Contributions are tax-deductible, the money grows tax-free, and withdrawals are tax-free if used for qualified medical expenses. After age 65, funds can be withdrawn for any purpose (subject to ordinary income tax, but no penalty), making it a versatile retirement savings tool.

Municipal Bonds: Interest earned from municipal bonds is generally exempt from federal income taxes and potentially state and local taxes if issued by your home state.

IRREVOCABLE LIFE INSURANCE TRUSTS

An (ILIT) is a sophisticated estate planning tool designed to own a life insurance policy and remove its proceeds from the insured's taxable estate. The primary purpose is to preserve wealth for beneficiaries by minimizing federal and state estate taxes, which can be significant for larger estates. Key Benefits 

• Estate Tax Reduction: The main advantage is that the life insurance death benefit is excluded from the grantor's gross estate, potentially saving substantial amounts in estate taxes.
• Liquidity for the Estate: The ILIT can provide immediate cash to the estate (by purchasing illiquid assets like real estate or a family business from the estate, or by making a loan to the estate) to pay taxes, debts, and other expenses without forcing a sale of major assets.
• Asset Protection: Assets held within an ILIT are generally protected from the grantor's and beneficiaries' creditors.
• Controlled Distributions: The grantor can specify exactly how and when beneficiaries receive funds, which is useful for minors, individuals with special needs, or those who may not manage a large lump sum wisely.
• Probate Avoidance: Assets in the trust bypass the public probate process, ensuring privacy and potentially faster access to funds for beneficiaries.

LIFE INSURANCE RETIREMEN PLAN (LIRP)

A LIRP is a strategy using a permanent life insurance policy's cash value to build supplemental, tax-advantaged retirement income alongside traditional retirement accounts. It is not a formal retirement account itself, but a financial tool best suited for specific individuals, primarily high-income earners LIRPs use a permanent life insurance policy (such as whole life, universal life, or variable universal life) that accumulates a cash value over time. 

• Premiums are paid with after-tax dollars.
• A portion of the premium covers the cost of the life insurance and related fees, while the excess goes into a cash value account that grows tax-deferred. To maximize retirement savings potential, policies are often "overfunded" (within IRS limits to avoid becoming a Modified Endowment Contract or MEC) to grow the cash value faster.
• The cash value can be accessed in retirement through tax-free withdrawals of the principal (your contributions) and tax-free policy loans.
• A death benefit is paid to beneficiaries tax-free upon the policyholder's death, though any outstanding loans will reduce this amount.

PREMIUM FINANCING

Life insurance premium financing is a strategy where a third-party lender provides a loan to cover the premiums for a life insurance policy. This allows high-net-worth individuals to secure a large policy without liquidating their assets, as the loan is secured by the policy's cash value and potentially other collateral. The borrower pays the loan's interest, and the strategy aims to benefit from investment returns that are higher than the loan interest rate.

How it works 

• Loan for premiums: A third party, such as a bank or specialized finance company, lends money to cover a significant portion, or all, of the life insurance policy premiums.
• Collateral: The life insurance policy is assigned to the lender as collateral for the loan.
• Interest payments: The borrower is responsible for paying the annual interest on the loan. The loan may also be structured so the interest is capitalized, meaning it's added to the loan balance and accrues, which impacts the policy's cash value and death benefit.
• Loan term: The loan can last for a set period, such as five to fifteen years, or for the life of the policy.
• Repayment: At the end of the term, the borrower can pay off the loan, refinance it, or continue paying premiums directly.

CHARITABLE REMAINDER ANNUITY TRUSTS

A CRAT is an irrevocable trust where you donate appreciated assets, receive a fixed annual income for life or a term (up to 20 years), get an immediate tax deduction, and the remaining assets go to charity, offering tax benefits and a reliable income stream but with no potential for increased payments if investments boom. Key features include a one-time contribution, a fixed dollar payout (5%-50% of initial value), and complex rules requiring expert guidance, making it ideal for highly appreciated assets like stocks or real estate to avoid immediate capital gains taxes.

How a CRAT Works 

1. Fund the Trust: You transfer assets (e.g., stocks, real estate) into the CRAT.
2. Tax-Free Sale: The trust sells these assets without paying immediate capital gains tax, reinvesting the full proceeds.
3. Receive Income: You (or other beneficiaries) get a fixed dollar amount each year, determined at the start (at least 5% of the initial value).
4. Charitable Remainder: After the term ends (lifetime or 20 years), the remaining assets go to your chosen charity.

 Key Benefits 

• Income Stream: Provides a predictable, fixed income.
• Tax Deduction: Earns an immediate income tax deduction.
• Capital Gains Avoidance: Sells assets tax-free, reinvesting more capital.
• Asset Diversification: Allows for diversification within the tax-exempt trust.

PRIVATE FAMILY FOUNDATIONS

This is an ideal mechanism for selling appreciated property and/or creating significant cash flow, while simultaneously creating a legacy. 

• Property - Stocks, Collections, Real Estate, Business Ownership
• Tax advantages - Avoid Capital Gains, and secure instant tax deduction
• Family Foundation is funded by invested portion of Trust
• Family or Donor's appointees sit on Board of Family Foundation
• Donor receives entire value of gift property over 5, 7 or 10 years through a stream of annuity payments
• Donor's family receives entire value of gift property from Wealth Replacement Trust funded by Annuity payments

CONSERVATION EASEMENTS & LAND TRUSTS

In essence, uses legal tools (easements) and financial strategies (tax benefits, endowments) to permanently conserve land while providing significant financial advantages to landowners and ensuring long-term protection via robust land trust stewardship. Involves landowners strategically reducing taxable income, estate, and property taxes by donating land use rights to a Land Trust, receiving significant federal/state tax deductions, potentially cash payments (like USDA ACEP), and ensuring perpetual land preservation, requiring careful appraisal, due diligence, and stewardship funding for the land trust to manage the easement long-term. The net effect to an owner is tax advantages, enhanced cash flow and reducing estate tax bills. This is an especially valuable tool when the intent is to preserve the club for the next generation.

Business Owner Planning Needs

BUY-SELL AGREEMENT FUNDING
A buy/sell agreement, also known as a buyout agreement, is a contract funded by a life insurance policy that can help minimize the turmoil caused by the sudden departure, disability or death of a business owner or partner. A buy/sell agreement gives employers peace of mind knowing that their business is in capable hands should they no longer be able or want to manage it.

It also can: 

• Provide money to create a fair market value exchange Promotes equitable and orderly transfer of wealth, ownership and management
• Offer tax advantages
• Guarantee heirs a buyer for assets they may not know how to manage
• Provide heirs cash to pay estate debt, expenses and taxes

KEY-PERSON COVERAGE
Replacing a key person takes time and money − and could cost the business valuable clients during the transition. Key person life insurance offers a death benefit that can help cover financial losses that occur at the death of a key person. This helps assure continuity of the business for employees, customers and creditors. Establishing and maintaining a key person policy on your top employees also affirms their value to your business, strengthening the relationship.

Uses can be any of the following: 

• The death benefit can be used to recruit and develop a replacement for the previous key employee
• Coverage is a business asset that enhances your company’s creditworthiness for commercial borrowing
• The policy’s cash value may be available to your business through a withdrawal or loan if needed

EXECUTIVE COMPENSATION & RETENTION
Companies use life Insurance as a way to reward and retain key executives. Because these plans are non-qualified, they can be offered selectively to key executives, whose contributions to the company's qualified plan, such as a 401(k), are limited by the maximum annual contributions or the income eligibility limits, or both.

Typically, the company and the executive sign an agreement that promises the executive a certain amount of supplemental retirement income based on various eligibility conditions that the executive must meet. The company funds the plan out of its current cash flows or through the funding of a cash-value life insurance policy. The money, and the taxes on it, are deferred. After retiring, the executive can withdraw the money and must pay state and federal taxes on it as ordinary income.